Wednesday, July 3, 2013

The
Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended)
expands health insurance coverage primarily through two mechanisms: by
expanding the existing Medicaid program and by establishing new health
insurance exchanges where certain individuals and businesses can purchase
private health insurance. Under ACA, Medicaid and exchanges are envisioned
to work in tandem, with the potential to provide a continuous source of
subsidized coverage for lower-income individuals and families, beginning
in 2014.

On June 28, 2012, the U.S. Supreme Court issued a decision in National
Federation of Independent Business v. Sebelius. The Court held that
the federal government cannot terminate current Medicaid program federal
matching funds if a state does not expand its Medicaid program,
effectively making the ACA expansion “optional.” As a result, some states may
choose not to expand their Medicaid program. Individuals who are eligible
for Medicaid are not eligible for subsidies in exchange plans. Thus, some
individuals in these states would not be eligible for Medicaid and could
become eligible for subsidized exchange coverage, while others may remain uninsured.

Individuals who receive coverage through exchange plans will likely not receive
the same benefits offered by the Medicaid program, and vice versa. For
example, traditional Medicaid provides a wide range of benefits to certain
beneficiaries that are not typically covered in major medical plans in the
private market, such as non-emergency transportation services or Early Periodic
Screening, Diagnosis, and Treatment (EPSDT). Exchange plans will reflect a “typical” private
health insurance plan offered by employers, which generally includes a wide
range of benefits, but not necessarily all, that are offered to various
Medicaid groups of individuals. Exchange plans will be required to offer
essential health benefits, which include preventive services with no
cost-sharing, a benefit available to many, but not all, Medicaid beneficiaries. Thus
there will likely be differences in available benefits for some individuals,
depending on whether they are covered by Medicaid or exchange plans.

In lieu of traditional Medicaid benefits, states can choose to offer an
alternative set of benefits (benchmark and benchmark-equivalent coverage)
that will include the essential health benefits, but only to certain
groups of Medicaid beneficiaries. This alternative set of benefits has the potential
to more closely align the benefits under Medicaid and the exchange for certain individuals.

In addition to differences in benefits, there may also be differences with
regard to the costs required of individuals. Currently, states may require
certain Medicaid beneficiaries to share in the cost of services, but
because of their lower income, such obligations are generally limited. Nonetheless,
variation exists across the different categories of Medicaid eligibility groups
with respect to costs. Similarly, ACA provides for premium and cost-sharing
assistance for the purchase of exchange plans for certain lower-income
individuals. However the only permissible variation across qualified
individuals (or families) for these exchange subsidies is based on income.

Another group for whom the alignment between Medicaid and exchanges is
important is composed of individuals who are covered by Medicaid today,
but who may lose Medicaid coverage when states are allowed to scale back
their Medicaid program. This state “maintenance of effort” requirement for
covering certain adults will be lifted beginning in 2014 (and in 2019 for the
coverage of children). Some of these individuals will qualify for subsidies
through exchange plans, while others may become uninsured. Additionally,
some individuals may “churn”; that is, they may go back and forth between
Medicaid and exchange coverage, depending on their financial or other situation
at the time. While some “churning” may be unavoidable, minimizing its
effects may be critical to the health coverage of affected individuals and
families.

The 113th and future Congresses will likely
continue to play a significant role in shaping U.S. health care policy.
This report provides an analysis of some of the key similarities and
differences between Medicaid and insurance plan structure in plans offered
through exchanges. Because Medicaid services vary by population covered
and by state, and exchanges’ plans can also vary by state, this report
provides insight into the complexities and issues when comparing beneficiary benefits
and costs to individuals for Medicaid and the exchanges. The inherent
variations in Medicaid and the uncertainty about exactly how the exchanges
will operate are just two of the factors that complicate a comparison.

Date of Report: June 26, 2013
Number of Pages: 34Order Number: R42978Price: $29.95

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